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Influence Of Organizational Structure And Culture: Tesco

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Question:

Describe about the influence of organizational structure and culture on the business performance?

 

Answer:

Introduction 

The following report prepared by me evaluates the role of organizational structure and culture in the global business world. In the existing market scenario, dealing with people remains the most important aspect in building a successful business. Organizational behavior analyses individual, group and a business entity as a whole. Additionally, it examines the impact of organizational and culture on the business performance of the firm. According to me organization structure and organization culture are co-related and determines the business performance of the brand to large extent. Organization culture is a major influencing factor on talent retention and job satisfaction for employees.

Organization structure and culture of British Airways

According to (Shafritz et al. 2015) British Airways has a flat organizational structure. Thus, I can say that this assists the brand to administer over its huge span of business operations throughout the globe. However, a traditional hierarchical structure would not suit its purpose. Thus, I feel that instructions coming from the top management would not be executed evenly throughout its global market.  A hierarchical structure promotes rigidity and, therefore, would not have a positive impact on its business performance. A matrix organizational facilitates employees to report to both product manager and operational manager. According to me this structure is not practically feasible in such a large business entity, as it would incur huge operational expenditures.

The British Airways has a task culture where employees are divided into specific teams (Bock et al. 2012, p. 279). Thus, teams are duly allotted specific tasks that should be completed within a specific period. This is quote similar to its existing flat organizational structure where powers and authority are spread evenly worldwide. A task culture in an organization creates motivation among employees, to achieve individual as well as organizational goals. When compared to the role culture, which is prevalent among many organizations, it is more beneficial and effective. In the case of British Airways, it is essential that it provides superior customer service to each passenger boarding its airlines. Thus, it is highly beneficial if such enormous business functionalities is equally divided into teams having an operation manager each.

In my opinion, the role culture is suited to smaller organizations restricted to certain geographical boundaries. In this system,   daily business functionalities would be allotted to each employee as per the necessary expertise acquired by the individual. The concept of role culture in an organization would thrive in a matrix based organizational structure (Bedarkar et al. 2016, p.19). As such it becomes imperative that the brand emphasizes on the task culture to complete a large volume of work in a lesser time.  The power culture states that authority would remain in the hands of a few individuals in an organization. Thus, I can perceive that they would govern entire organizational operations, and there would not be any scope for consultation with fellow co-workers. Therefore, I can mention that the power culture complements the hierarchical structure, where full decision-making and ordering process rests with the top management in an organization.

 

Relationship between organizational structure and culture and its influence on the business performance

In my view, an organizational structure and culture are co- dependent on each other. Thus, organizational culture and organization structure have the similar traits in a business organization. I can state the following affects on organizational change and organizational structure.

Employees productivity- If the management of British Airways is not satisfied with the performance of British airways, he can consider making changes in the organization structure of the brand.  As such, this will facilitate smoother business operations of the brand leading to enhancement in the employee productivity performance of the brand. 

Staff empowerment- Putting certain responsibilities in the lower-ranked employees would motivate them to perform better them at the workplace. Thus, employees would be accountable to their performance, and would be supportive in times of crisis (Pioch et al. 2014, p.729).

Customer service- British Airways emphasizes on providing superior customer service to passengers, and strives to meet their expectation. Therefore, its organizational structure can facilitate improved customer service facilities to its consumers.  

Culture- An organizational culture has a deep impact on the organizational performance of the brand (Pettinger 2013). British Airways being a global brand depends on teamwork and cooperation among workers to conduct its business operations on daily basis.

Factors influencing employee behavior in the work place

Following are the attributes, which affects the employee behavior at the British Airways. 

Job security- Job security to employees is a major determinant of their workplace behavior (Gouldson and Sullivan 2014, p.2972). Employees feel secure and perform better if they are aware that their job is safe for a period. An organization providing job security to its employees create employee loyalty towards the brand

Work Environment- British Airways provide a better workplace environment towards its employees than its rival brands in the global market

Remuneration- The brand provides excellent remuneration to its current employees (Wilson 2013.) Additionally, it provides performance based incentives to employees to offer encouragement to employees to perform better.

Employee expectations- British Airways employs a large number of qualified people possessing expertise from various fields (Alvesson and Sveningsson 2015). Money is not always the main concern for these people. Self-respect and achievement of individual goals remains very important. If the employees do not meet these expectations, their performance might be hampered.

 

Effectives of different leadership styles in different organizations

The below mentioned are the leadership style and its effects in different organizations

Autocratic- An autocratic leadership creates a division between the leaders and the workers. Here, decisions are made without any consultation with co-workers. Thus, employees may feel disconnected from the management under such a leadership style. However, this kind of governance works where situations demands fast response from the top management.

Participative leadership- Perkins and Arvinen-Muond (2013) mentioned that democratic or participative leadership is generally the prevalent leadership style used nowadays.  Here, duties and responsibilities are delegated equally in the organization, and every team is accountable to the management.  This sort of leadership is sympathetic to employee issues, and tries to resolve them in a fair manner.  

Delegative leadership- Delegative leadership refers to leaving decisions to the respective teams. This leads to confusion towards job descriptions and lines of authority. Also, there is a lack of employee morale in the organization.

Comparing the effectiveness of leadership styles in ASDA

According to Rothaermel (2015.), leadership help transform ideas to reality.  In my view, Asda practices democratic leadership style. The management at Asda are dedicated to offer maximum co-operation, fairness and guidance to offer its employees. The management provides mission and vision, so that organizational operations are aligned with organizational goals. The traditional leadership style of authoritative and rigid would not be suited to such a retail brand, which has retail stores throughout the world. Asda managers working at various levels, are empowered enough to guide their associates in their job role (Shafritz et al. 2015). The brand considers assessing employee strengths and weakness, and then planning accordingly. The management prepares transparent employee policies. Here, employees are judged according to their performance. As such, employee has to bear responsibility towards the respective job roles assigned.

Different management approaches used in different organizations

Scientific management approach- According to Alvessonand and Sveningsson (2015), scientific management theory evaluates manufacturing process in organizations and its implications on the production cost. This management approach is primarily used in reducing labor costs and achieving economic stability in the organization. Samsung has adapted to the scientific management to offer quality products at reasonable prices to customers,

Classical management approach- It can be stated that the classical management approach promotes a hierarchical structure, with three different management categories (Pioch, and Gerhard 2014, p. 729). Each group has specific duties and responsibilities.  The top management generally consists of the board of directors and important executives of the organization, and prepares the long-term objectives of the organization. The middle level management is concerned with overseeing managers, supervisor and implementation of required business operations. The final category of employees includes who are involved with business functionalities in a daily basis, and ensure that necessary targets are made. Apple has been successfully using the classical management approach to administer its daily functions. This has assisted the brand to be the leader in the electronic segment.

Bureaucratic approach- I feel that the bureaucratic approach is featured by – well defined job roles, hierarchical structure, systemized organizational procedures and recruiting specific candidates meeting job requirements.  It is the most traditional approach to managing a business enterprise, and is used in government organizations.

Human relations approach- The human relations approach is involved in developing the human capital in an organization (Pettinger 2013).Great stress is placed on training the employees, so that employees posses the required expertise. The human relations approach is used in financial audit firms like PwC, Delloitte, and KPMG.

Systems approach -The system approach treats the organization like a system. Thus, it provides all the necessary inputs, and controls its responses to the changes in the external environmental. Specially used in retail chains like Walmart which operates a number stores globally.

 Contingency approach - A contingency approach to management states that effective management is dependent on several factors like employee expertise, morale and market conditions.  This theory is relevant in the global retail business, where the market condition is vulnerable to external environmental factors.

Discussing different ways of using theories on motivations inside the organization

In this particular part, the study has focused to highlight the importance of following different motivational theories inside the organization. Tesco, one of the largest retail multinational corporations based on UK, has been chosen for this specific part in order to show the impact of different leadership styles for running an organization successfully.

Logo of Tesco

Figure 1: Logo of Tesco

(Source: Tesco.com 2016)

Explaining how the impact of leadership styles has a greater influence on the motivation at workplace

Leadership style consists of different types such as autocratic leadership style, participative leadership style, delegate leadership styles and authoritarian leadership style. Different kinds of leadership styles possess a greater impact for the progress of a particular organization (Blaskovics 2014, p.36). For an example, Tesco as one of the most popular retail companies likes to follow participative leadership style inside the organization. With the help of participative leadership style, the managers of Tesco intend to give immense opportunity to the employees for sharing their point of views regarding the business goal.

As a result, employees can also participate in making any kind of decision related to their business process. Here, leaders do not intend to impose their decision on the employees. Consequently, employees in return being motivated intend to provide their best effort in order to reach the target. As per the revenue status of TESCO from the year 2011 to 2015, it has been observed that the financial growth has been increased to 40,766 from the year 2011, to 43,573 in the year 2015 in UK (Tescoplc.com 2016). Therefore, it is quite evident that the impact of participative leadership style definitely possesses a positive outcome that motivates the internal employees for providing good service to the customers. As a result, Tesco has faced a satisfied revenue growth in last five years (Collins et al. 2014, p.660).

 

Comparative analysis of various motivational theories at the workplace

Herzberg’s Motivation-Hygiene motivational theory is based on two factors primarily that affect the rhythm of business at the organization. In order to maintain a business process, the employees and the employers both have to face immense satisfied and as well as dissatisfied factors (Gray and Williams 2012, p.13). The dissatisfied factors affect highly for maintain the job in a systematic manner. Several satisfied and dissatisfied factors regarding the job have been highlighted in the table that is as follows:

 

Satisfied factors

Dissatisfied factors

Appreciation

Communication gap

Recognition

Inappropriate leadership style

Participation

Salary issue

Growth in business

Unnecessary target achievement force

Achievement in business

Lack of co-operation


Table 1: Different factors in Herzberg’s Motivation-Hygiene motivational theory that affects business flow

(Source: Gray and Williams 2012, p.13)

The percentage of dissatisfactory factors in TESCO is less because of which particular company is surrounded with 472,000 employees in UK (dailymail.co.uk, 2016). The employees of this particular company get enough facilities and benefits from the management team.

The theory X and theory Y, one of the well-known motivational theories had been developed in order to fulfil some of the relevant business purpose inside the organization has been established by Mc Gregor. Theory X motivates the authoritarian leadership style inside the organization. In this particular leadership style, management intends to impose their decision on the employees. They do not have the opportunity to express their point of view regarding the business goal (Indermun and Karodia 2013, p.43).

On the other hand, theory Y likes to support participative leadership style inside the organization. The characteristics of participative leadership style has already mentioned above. Therefore, the difference between the theory X and theory Y is as follows:

Theory X

Theory Y

Authoritarian leadership

Participative leadership

Characteristics:

Imposing decision on the employees

Less opportunity to share any point of view regarding business goal

The decision of management is final

Characteristics:

Employees get immense opportunity to share their opinion regarding business

Participation between employees and managers

Employees becomes motivated for reaching their goal


Table 2: difference between Theory X and theory Y

(Source: Justin and Heyliger 2014, p.34)

The management team of TESCO as already stated maintains participative leadership style within their organization as they provide importance of the opinion of their employees regarding the business goal (Justin and Heyliger 2014, p.34).

The necessity of motivational theory for the managers of an organization

Implementation of motivational theory inside the organization is very important because based on those theories managers like to plan their business strategies and policies at their workplace. Moreover, different motivational theories help the organizations to have a clear knowledge about what organization should follow and what they should ignore for reaching the business target (Khamis et al. 2013, p.45).

This particular part is primarily concerned with organizational strategies of TESCO. Among different motivational theories, TESCO tends to provide emphasis on theory Y that supports maintaining participative leadership within the organization.

Different mechanisms in order to develop effective teamwork inside the organization

In this particular part, emphasis has been given on the utilization of different mechanism in order to maintain the effective communication among team members. This particular part has provided a practical example of ASDA, one of the largest retail companies of UK existing in numerous countries. This study has concentrated how this specific organization tends to use different mechanisms for maintaining connection with team members.

Logo of ASDA

Figure 2: Logo of ASDA

(Source: asda.com 2016)

Explaining the nature of group behavior at the workplace

Group behavior implies different ways how people like to behave within the group in order to maintain unity. Individual behavior is highly dependent on the group behavior.  For an example, some of the companies like to focus on group activities rather than focusing on the individual performance. ASDA is one of such companies, which likes to concentrate on the group activities of the employees in order to reach the business goal. In this situation, this particular company needs enough co-operations and support on behalf of the team members based on whom the group has been formed (Larsen et al. P.31).

The management team of ASDA has believed that in order o run an organization systematically, the relations among the team members have to be very much effective so that they can take unanimous decision towards the business goal. As per the relevant data of ASDA regarding customer service system available in its official website, it has been observed that the average number of customers of ASDA from the year 2011 to 2015 has been raised comparatively (asda.com 2016).

 

Mentioning the factors that help to promote for the development effective teamwork inside organization

Several factors help to promote necessary development for an effective teamwork. At the workplace of ASDA, the factors that influence in team development inside the organizations are as follows:

Avoiding Diversity:

Employees of ASDA are from different culture and background. As a result, it has the major chance to maintain diversity inside the organization. Giving priority to the diversity within the workplace hampers the communication process as well as equality within the team members. That is the reason; the human resource management team of ASDA has decided to entertain diversity within a group so that they provide equal respect to the people of every culture and religion (Saleem et al. 2015).

Avoiding Communication gap:

The management team of ASDA intends to provide an effective training and guidance to the employees in order to enhance their communication skill. As a result, communication barriers do not occur when the employees try to communicate with each other.

Unanimous decision-making:

Unanimous decision-making is a serious factor that ASDA like to maintain from the very beginning. With the help of participative leadership, the employees can express their opinion regarding a business. It helps immensely to maintain unity among the group members of ASDA.

Factors promoting for the development of effective communication

Figure 3: Factors promoting for the development of effective communication

(Source: Gray and Williams 2012)

The impact of technology for running a team successfully within the organization

Technology plays a major role in order to maintain effective connection within the team members for providing good services to the customers. With the help of advanced technology system, different team members of a particular group keep a constant record about the product as well as customer services. Moreover, ASDA is highly dependent on the internet services. The team members like to keep connection through e-mail. They exchange necessary feedbacks to each other by mail. As per the feedback, service providers like to change their business strategies and policies inside the organization (Blaskovics 2014, p.25).

Conclusion:

The entire study has provided in-depth knowledge of the importance of behaviour inside the organization. The implementation of Motivational theory is very much important for running an organization successfully. For that purpose, this study has executed a comparative analysis in different motivational theories. In four parts of the entire study, four different organizations have been chosen in order to highlight how they like to maintain individual behavior within the organization. Importance of using various mechanisms has also been discussed in this particular study.

 

Reference List

Blaskovics, B. 2014. ‘Impact of Leadership Styles on Project Success; the Case of a Multinational Company’. Dynamic Relationships Management Journal, 3(2), pp.21-36.

Collins, B., Burrus, C. and Meyer, R. 2014. ‘Gender differences in the impact of leadership styles on subordinate embeddedness and job satisfaction’. The Leadership Quarterly, 25(4), pp.660-671.

Gray, E. and Williams, J. 2012. ‘Retail Managers: Laissez-Faire Leadership Is Synonymous With Unsuccessful Conflict Management Styles’. OJL, 01(03), pp.13-16.

Indermun, V. and Karodia, A. 2013. ‘The Site of Purgatory : Management Leadership Styles and its Impact on Employee Performance at a Family Owned Business’. AJBMR, 3(1), pp.43-52.

Justin, B. and Heyliger, W. 2014. ‘Academic Administrator Leadership Styles and the Impact on Faculty Job Satisfaction’. Journal of Leadership Education, 13(3), pp.34-49.

Khamis, N., Harun, Z., Tahir, M., Wahid, Z. and Sabri, M. 2013. ‘Motivational Factors of Professional Engineers and Non-Professional Engineers in Applying for License as Professional Engineer: A Comparative Study’. International Education Studies, 6(6), pp.45-50.

Larsen, T., Rosenbloom, B., Anderson, R. and Mehta, R. 2009. ‘Global Sales Manager Leadership Styles’. Journal of Global Marketing, 13(2), pp.31-48.

Mail Online, (2016). Home | Daily Mail Online. [online] Available at: https://www.dailymail.co.uk/ [Accessed 2 Mar. 2016].

Saleem, H. 2015. ‘The Impact of Leadership Styles on Job Satisfaction and Mediating Role of Perceived Organizational Politics’. Procedia - Social and Behavioral Sciences, 172, pp.563-569.

Tesco.com, (2016). Tesco | Online Groceries, Homeware, Electricals & Clothing. [online] Available at: https://www.tesco.com [Accessed 2 Mar. 2016].

Tescoplc.com, (2016). Tesco plc. [online] Available at: https://www.tescoplc.com/ [Accessed 2 Mar. 2016].

www.asda.com, (2016). Asda.com - Online Food Shopping, George, & more. [online] Available at: https://www.asda.com [Accessed 2 Mar. 2016].

Shafritz, J., Ott, J. and Jang, Y., 2015. Classics of organization theory. Cengage Learning

Bock, A.J., Opsahl, T., George, G. and Gann, D.M., 2012. The effects of culture and structure on strategic flexibility during business model innovation. Journal of Management Studies, 49(2), pp.279-305.

 Bedarkar, M., Pandita, D., Agarwal, R. and Saini, R., 2016. Examining the Impact of Organizational Culture on Customer Centricity in Organizations: An Analysis. Prabandhan: Indian Journal of Management, 9(2), pp.19-28. 

Pioch, E.A. and Gerhard, U., 2014. Organizational culture as differentiator in international retailing. The Service Industries Journal, 34(8), pp.729-749.     Pettinger, R., 2013. Organizational behaviour: performance management in practice. Routledge.  

 Gouldson, A. and Sullivan, R., 2014. Understanding the governance of corporations: an examination of the factors shaping UK supermarket strategies on climate change. Environment and Planning A, 46(12), pp.2972-2990

Wilson, F.M., 2013. Organizational behaviour and work: a critical introduction. Oxford University Press

Alvesson, M. and Sveningsson, S., 2015. Changing organizational culture: Cultural change work in progress. Routledg

Perkins, S. and Arvinen-Muondo, R., 2013. Organizational Behaviour: People, Process, Work and Human Resource Management. Kogan Page Publishers.      Rothaermel, F.T., 2015. Strategic management. McGraw-Hill.

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